Inside our Q3/23 Digital Commerce Spend Report: Software spend is scaling

Our Q3/23 Digital Commerce Spend Report brings you data-driven insights and analysis on spending patterns within digital commerce to help companies identify trends, optimise investment and inform strategic decisions. Download the report here.

With peak season preparation in full swing, this quarter has seen some interesting shifts in inventory and software spend. We look at where businesses are allocating their budget and how it has changed year-on-year.

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Inventory spend slows down

Inventory management became key to tackling inflation in H1, and businesses stocked up to prepare for Black Friday and beyond. This resulted in record-high inventory spend during Q2/23, with 12.9% of budgets spent here – almost double the amount spent in Q4/22.

The upward trend dwindled this quarter, with businesses allocating 9.84% of their budgets to inventory. Although budgets decreased month on month from May to August, spending started to increase again in September. As we mentioned in our article on Q3/22 spend trends, businesses are switching their focus from stocking up on inventory to ramping up ads to drive sales ahead of peak season.

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Software spend shows signs of recovery

After we saw initial signs of software spend recovering last quarter, things continued to improve in Q3/23. Businesses increased their investment from 4.9% of budgets in Q2/23 to 11.42% in Q3/23

SMB digital commerce grew their software spend this quarter, showing a big change in strategy from Q2/23. They spent 113% more on average compared to the same quarter a year ago and 122% more than in Q2/23.

Despite a 19.49% decrease in investment YoY, Mid-market digital commerce increased their spend by 168.22% compared to last quarter. Digital agencies followed this trend, reducing their average spend by 35.9% YoY but increasing QoQ by 149%.

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Sales support spend continues to scale

Google was the partner of choice this quarter, with 46.5% of budgets this quarter. Google Workspace and Google Cloud among the most-used products. Microsoft saw significant growth, from 3.2% of budgets in Q2/23 to 10.2% this quarter.

As we saw in Q2/23, customers chose vendors who could help support their sales initiatives. Online advertising and lead generation platforms again saw an increase in budget this quarter, with Klaviyo, LinkVertise, ExoClick and LeadSense joining the tech stack.

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Methodology

Insights in this report come from analysing thousands of aggregated and anonymised transactions on Juni cards. SMB digital commerce represents companies with <50 employees. Mid-market digital commerce represents companies with >50 employees. Digital agencies reference both digital marketing and advertising agencies as well as affiliate marketing companies. Quarter-over-quarter comparisons consist of customers who have been active with Juni over the two quarters. Year-over-year comparisons consist of customers who have been active with Juni over that entire 12-month period of time. Numbers were compiled and analysed on a quarterly basis.